Depreciation never claimed

[erchess]

Taxpayers have had home office as long as I have been doing their return and longer and depreciation has never been claimed. I'm not sure what kind of humongous brain freeze got me to this point but here I am. Isn't there a way to go back and recover the depreciation on the 2011 return and isn't it ok if some of the old years are now closed? If someone will tell me the right Pub or the right pages of our book I can take it from there. I have the full online library.

[FEDUKE404]

You have a challenge

Depreciation is always "allowed or allowable."

My guess (not much more than that!) is that you can only potentially amend within the proper time frame for such.

OTOH, you likely will need to figure the "missed" earlier depreciation and keep it available for eventual disposition of the residence. Hopefully you have the earlier years data files/software still available.

The other small gorilla in the room is whether they could have even used (all/some/none) the depreciation for each year (Form 8829, bottom) in the first place.

Be sure to tell your client the hourly clock will be running to straighten out this mess....

FE

[Bill Tubbs]

Form 3115

Taxpayers have had home office as long as I have been doing their return and longer and depreciation has never been claimed. I'm not sure what kind of humongous brain freeze got me to this point but here I am. Isn't there a way to go back and recover the depreciation on the 2011 return and isn't it ok if some of the old years are now closed? If someone will tell me the right Pub or the right pages of our book I can take it from there. I have the full online library.

Perhaps this thread may help:

http://www.thetaxbook.com/forums/showthread.php?t=19260&highlight=change+accounting

[Gretel]

Taxpayers have had home office as long as I have been doing their return and longer and depreciation has never been claimed. I'm not sure what kind of humongous brain freeze got me to this point but here I am. Isn't there a way to go back and recover the depreciation on the 2011 return and isn't it ok if some of the old years are now closed? If someone will tell me the right Pub or the right pages of our book I can take it from there. I have the full online library.

I believe you can use form 3115 (automatic approval) to catch up all the depreciation. If client always had enough profit for the deduction it should be straight forward. Form 3115 is a pain though.

You might also want to look into the issue what actually happens if they ever sell the house. If there is no gain anyway the whole issue is a mute point. If they never plan to sell but let kids inherit it is also a mute point. Of course, people change their minds. I would want to set the record straight, no matter what.

[appelman]

A "mute" point?

Presumably a very quiet one.

[Gretel]

Presumably a very quiet one.

“Moot point,” not “mute point”

I haven’t heard this myself, but my friend Celeste has and it’s so hilarious it deserves a blog entry.

Apparently Celeste has heard people say, “It’s a mute point.”

That’s “mute” pronounced “mee-yoot” as in remaining silent.

The correct term is “moot point” and the correct first word, its spelling, and pronunciation is “moot.” Like adding T to the end of what a cow would say.

And what is meant by “moot point”? A moot point is one that need not be decided, due to a change of circumstances. Very interesting, because the word “moot” by itself means “debatable, or subject to discussion,” the opposite of its use in the legal context. The shift in usage is slowly happening, starting here in the United States.

But what’s this about a “mute point”? As Celeste reports to me, some people say this thinking it means, “Let’s put the mute button on and cease any discussion on this.”

Wouldn’t it be funny if the term evolves this way to become correct? After all, with the ubiquity of remote controls and mute buttons, a “mute point” may make more sense than a “moot point” to someone who’s not a lawyer.

For today, however, it’s wrong. Say “moot point” and try not to stick a “y” sound in there.

Thanks, Appelman, for making me look this up. I am sure I say a number of funny things. As my car mechanic is joking with me, that I talk funny. It never occurs to him and in my ears he might be the one who is talking funny.

[Gary2]

Thanks, Appelman, for making me look this up.

And I would like to thank you for taking this correction constructively and humorously, as compared to the unfortunately common reaction to spelling corrections discussed in a recent Yahoo news article.